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Two and half years after a Cedar City-based flight school nose-dived into bankruptcy, three young Utah men face felony charges of illegally taking thousands of dollars in tuition, then leaving students with massive debts for flight instruction that was not provided.
Brothers Cole and Jarred Faddis, 28 and 30, respectively, and Jack Robert Tripp, 31, appeared in 5th District Court last week asking for bail reductions a few days after their arrests on charges filed by the Iron County Attorney's Office. The 25-count complaint stems from their operation of National Pilot Academy from August 2006 until it shut its doors in March 2009.
Former students and their families cheered the arrests, but the prospect of getting their money back remains cloudy.
"The wheels of justice move very slowly. This is a step in the right direction," said Sherri Hanson, the mother of a former NPA flight student who took out $60,000 in loans. "I would love to see them take this to the federal level. This was federal money that a lot of these kids had."
NPA operated across state lines with locations in Arizona, Florida and Nevada, using leased planes, and boasted a non-existent affiliation with Utah Valley University's aviation program to recruit students, former students say.
The three defendants are each charged with 12 counts of communications fraud, another 12 for unlawful dealing of property by a fiduciary, and an umbrella charge accusing them of running a criminal enterprise. Each is a second-degree felony with a possible prison term of up to 15 years. The charges identify 12 students who collectively paid NPA $546,000, much of it in the form of checks from lenders that the students were forced to endorse to the school — even though the sums exceeded the students' tuition.
"Robert Tripp specifically told us you are not allowed back in school until you pay in full. It was a threat," said Melanie Paulk-Adderrahman, the mother of one student. The Cedar City yoga teacher had co-signed on her son's two $32,000 loans, which they forwarded to the school.
Charges allege tuition payments were not set aside to cover the students' instruction and living expenses, even after state authorities repeatedly warned the school it was not authorized to collect tuition in advance.
"These students, and more, paid for flight training they never received. The Defendants took tuition money, comingled [sic] it with other operational funds, knowing that NPA was operating in violation of the law. NPA received some of these funds after the Division [of Consumer Protection] and Third District Court order[ed] NPA to cease and desist," wrote Cedar City police detective Nate Williams in an affidavit. "The Defendants told employees that a bond had been obtained and that students funds were protected in separate accounts."
Reached Thursday, Jared Faddis declined comment. Cole Faddis did not return a phone message and the Faddis' lawyer, Keith Barnes, could not be reached.
A family member posted Tripp's $100,000 bond. A court date has been set for Sept. 20.
Although many students and vendors are lined up to recover losses at the bankruptcy court, the Faddises have launched another flight school called Pro Air Aviation with their father David, a Cedar City pilot, according to state corporations filings. Several small airplanes are registered to Pro Air, two of which were put up as collateral in lieu of the brothers' $100,000 bail.
In September 2009, the brothers registered another firm called Skyline Management Services based in Lakeland, Fla., according to Florida corporations filings. In filings in the NPA bankruptcy matter, Paulk-Adderrahman's son, Spence Cagle, alleged the Faddises transferred NPA assets to the Florida operation.
After Cagle earned his flight instructor certification, the Faddises hired him to run NPA's North Las Vegas operation four years ago while he was still a student working on advanced certifications.
"It happened so fast, in a matter of hours. I'll never forget that, going to work and the doors were locked up. I lost everything that was in there," said Cagle, 25. "I had a good relationship with the guys. To my knowledge they were good people, family men. We played basketball with them ... I don't think they wanted to be crooks. They were just so disorganized."
Under Utah law, post-secondary proprietary schools may change up-front tuition only if they post bonds or are specifically exempted from the rule. NPA failed to secure the exemption, yet still collected tuition exceeding $40,000 from students, according to the charges.
Hanson, who lives in Tennessee, gave her son Jonathan 10 flight lessons for his 16th birthday, sparking a career interest in commercial aviation. Jonathan, who is not among the students identified in the criminal complaint, signed up for NPA's full offerings of certifications and moved to its Tucson location in 2008. He progressed through flight training before it stalled as he started on commercial certification in early 2009.
"I was calling Salt Lake every day seeing when they would send down an aircraft. Nothing came," said Hanson, now 22. He moved home, got a job and his family hired a lawyer to deal with the lenders' demands for repayment. They are now paying Sallie Mae $536 a month, even though Hanson is back in school.
Hanson is taking 18 credits at UVU, which granted him in-state tuition as he works toward an online aviation degree.
"I tell him this is a bump in the road to see how determined you are to follow your dream to fly," Sherri Hanson said. "He's not trying to get out of paying these loans."
National Pilot Academy
State investigators allege that the Cedar City-based school engaged in fraud when it charged aspiring pilots up to $60,000 in advance for flight training. The school lacked authority to charge up-front tuition, yet collected thousands before going bankrupt in March 2009, leaving many students saddled with debt, according to charges filed in state court.